Upbit is the clear center of crypto liquidity in South Korea, according to a new report from Kaiko Research. The firm says Upbit accounted for roughly 70% of total trading volume in 2025, while major KRW pairs such as BTC-KRW and XRP-KRW also showed trade-count data that reinforced its leading role over Bithumb, Coinone, and Korbit.
Kaiko’s report, titled The State of Liquidity on Korean Crypto Markets, argues that liquidity should not be reduced to headline volume. In its framework, liquidity means the ability to execute large orders quickly, near prevailing prices, and without causing major market impact. That makes execution quality as important as activity itself.
Volume spikes can hide weaker execution
To measure liquidity, Kaiko combines trading volume, bid-ask spreads, market depth, and slippage. The report says volume on its own can be misleading because it often jumps during stress events, exactly when trading conditions become less favorable. Kaiko points to the market dislocation on Oct. 10, 2025, as an example of heavy activity paired with worse execution quality.
Bid-ask spreads show the implicit cost of immediacy. Tight spreads usually mean easier entry and exit, while wider spreads reflect higher risk for market makers, especially during volatile periods. Kaiko adds that spreads on Korean crypto venues are shaped not only by volatility, but also by order book depth, venue fragmentation, and tick-size design.
Larger tick sizes shape KRW market structure
The report notes that major Korean exchanges, including Upbit and Bithumb, have historically used larger tick sizes in KRW markets. That choice favors stability and quote readability over very fine price increments. A larger tick size can mechanically widen the minimum spread, but it can also concentrate liquidity at fewer price levels and create stronger visible depth, which may suit retail-heavy order flow.
Kaiko also warns that displayed depth does not always match real executable liquidity. Stale quotes, fleeting orders, and hidden liquidity such as iceberg orders can all distort what traders think is available. For that reason, the report places strong weight on slippage, which captures the gap between the expected execution price and the price actually achieved in live market conditions.
Fees, local premiums, and shocks all affect liquidity
Fee policy is another factor. Kaiko says zero-fee trading can look attractive on the surface, but explicit fees do not simply disappear. Market makers may recover lost revenue through wider spreads, leaving total trading costs little changed unless higher participation offsets the difference.
The report also highlights the recurring Kimchi premium, where local demand pushes Korean crypto prices above global benchmarks for a period before arbitrage flows bring them back in line. That pattern shows how regulation and capital controls can fragment liquidity across jurisdictions.
Kaiko examined South Korea’s brief martial law declaration in December 2024 as a stress case. During that episode, headline risk drove a surge in trading volume while order book depth thinned and spreads widened. In stronger bullish phases and during fresh all-time highs, the report says new capital tends to refill books and compress spreads.
Kaiko’s conclusion is that crypto liquidity in South Korea is shaped by market structure, fee incentives, and investor behavior rather than one headline metric. On that basis, Upbit remains far ahead of its domestic competitors.